World View & Market Commentary. Forest first; Trees second. Focused on Real & Knowable facts that filter through the "experts" fluff and media hyperbole. Where we've been, what the future may hold and developing a better way forward.

Friday, October 7, 2011

“Constant development is the law of life, and a man who always tries to maintain his dogmas in order to appear consistent drives himself into a false position.”

-Mohandas Gandhi

Hang on – we’re about to embark on a strange, yet fascinating, journey across the fields of physics, economics, and then boating! Yes boating. What on Earth do these things have in common? They all must operate within the one true physical reality that is our universe, and progress in all these fields is held back by hanging onto false assumptions.

Splash! Goes the casting off of beliefs that are not true!

SMASHING PHYSIC’S FALSE ASSUMPTIONS…

The world is flat, remember, and so exploring across the horizon carries the risk of falling off the edge. And we’re at the center of the universe, why just look at the stars and planets that obviously revolve around me!

At the dawn of the twentieth century, the consensus was that man could never break the speed of sound. It was considered a physical impossibility. Then on October 14th, 1947, Chuck Yeager broke it, smashing that false assumption. Today the speed of sound is routinely exceeded in flight; even I have done it and can tell you that were it not for my airspeed indicator would not have perceived the difference.

Chuck Yeager

In the year 1905, a 26 year old named Albert Einstein postulated in his paper on Special Relativity that E=MC², and that nothing with mass can attain or surpass the speed of light (186,282 miles per second – 11.2 billion MPH). This past week scientists at CERN made the claim that neutrinos measured in Italy, which are extremely small but do have mass, repeatedly exceeded lightspeed by their measurements!

Cautiously, they spent the last two years ensuring that they are measuring correctly, that they have accounted for all factors such as the rotation of the planet, and yet they are confident they have a margin of error that is less than 8 inches measured over a course longer than 400 miles!

CERN Neutrino course

Of course their experiment needs to be reproduced and confirmed elsewhere, and in the mean time mainstream scientists are cautious. Several have gone so far as to insinuate that it is blasphemous to think that Einstein could be even partially wrong! The claim has been openly criticized by many, including Dr John Costella, an Australian-based physicist, who accused the researchers of making an "embarrassing gaffe" in their calculations; "Any physicist worth even a fraction of their weight in neutrinos will be shaking their head, knowing intuitively that the OPERA result is simply wrong," he wrote in a paper published online.

…Just like people intuitively used to think that the speed of sound could not be exceeded. The result goes against what he “knows” to be true, and thus his mind is closed to other possibilities.

Albert Einstein

This is an extremely important discovery, the smashing of this particular assumption will force physicists to stop resting on Einstein’s laurels, and to reach further in understanding the true nature of the universe. Einstein himself died knowing that big questions remained unanswered. He never could reconcile the fact that his own Special Relativity breaks down in the quantum world of the very small. Thus he, and others, spent a great deal of time looking for the Unified Theory which would possess no contradictions. While we know that both Relativity and Quantum mechanics accurately describe their respective worlds, both big and small, we also know that neither accurately describes the entire universe and thus they are either wrong or incomplete. Perhaps neutrinos exist in the realm between quantum and relativity?

This is the progression of science if one looks back in time. Newton, for example, was right in his descriptions of orbital mechanics and laws of motion, but only to a point – they were incomplete. And every experiment over the past century, until now, has proven that Einstein was right with his explosive equation Energy equals Mass times lightspeed squared (E=MC²).

While looking at the negative implications of that simple equation, it is easy to forget that what’s true on one side of the equation is also true on the other. On one side is Energy – but on the other is Matter (in motion). Catch that? Energy = Matter. Equations are interchangeable across that equals sign, and therefore Matter = Energy.

Let that sink in, it is profound and far more important than the way we usually think about that equation. Energy therefore, has to be everywhere; it is the basis of every thing. Energy is the very fabric of rocks, of space, of time, of you.

Every day you witness and participate in matter turning into energy – fuel is burned in your car’s engine. Food you consume is matter turning into energy within your body. The burning logs in your fireplace are matter releasing their energy. This is entropy in motion, you can see it. It is the principal of entropy that underlies the completely accepted as fact Second Law of Thermodynamics, which states in many ways that over time organized systems tend to wash out and will become unorganized.

While we can back up the Second Law with experiment after experiment, we fail to adequately address the fact that our physical universe in fact does exist, is organized, contains extreme temperature variations, and especially that Energy not only equals mass, but that some of that mass has the ability to reason and even has consciousness – life! Even the former tree that is burning in your fireplace (entropy) at one time was nothing but soil and water with the seed that passed on the information to make matter (a tree) grow from the energy within the soil and water (an organized system). Does not life, then, fly in the face of the second law of thermodynamics? Or is it just also incomplete in its description? Perhaps it is correct, except when information/ instructions are given that create the organization of matter from energy?

Question? If man can give the instructions to turn energy into matter, or even more profound, if man can give instructions to organic matter to assemble into another previously nonexistent life form, does that make man a god (to that life form)? Did you know that this has already been done by Craig Venter?

I like to think that I don’t have to have a label on everything, some things are simply not knowable, at least during my life time they are not. By not placing a label on the big questions, we keep our minds open to at least examine the possibilities. Once convinced that something is a particular way, then we begin to move down a path that may, or may not, be correct.

Wow, that’s a major league assumption! One that can hold back the progression of knowledge because it leads to a circular argument, and that excludes other possibilities.

The term “Big Bang, conjures up that supposed tiny, but spectacularly dense, spot of matter. According to Hawking, and others who now firmly believe in that theory, we’re supposed to believe that because all matter was perfectly still in a tiny dense spec that time did therefore not matter or even exist prior to the spontaneous explosion that expanded matter which created what we now think of as “space.”

Okay. Then what surrounded that infinitesimally heavy spec of matter before it exploded? And in what space did it expand into to create our new space? And why, exactly, if the matter was perfectly still did it spontaneously explode?

That’s quite the yarn if you really apply a little common sense. You know, I don’t pretend to have the answers to those questions, but I know that assumptions are being made at the expense of what is probably true. Heck, science still can’t tell you how water is formed or how it got on this planet to begin with. And I can’t help but think about E=MC², and that everything is comprised of, and surrounded in, a field of energy. I’m thinking there’s a lot more going on within that energy field than we can even imagine at this juncture in history.

E=MC² not only unlocked the atom (along with its negative connotations), but it is profound in describing the physical universe which places real limits upon human engineered enterprises – like economics. Economics, and “money,” while human constructs, must still operate inside of the real physical world. Should it conflict with the real physical world, guess which one wins? False beliefs are not a cool thing to hang onto.

SMASHING ECONOMIC FALSE ASSUMPTIONS…

People are self-interest driven creatures, just like all creatures on the planet are. Ultimately we are in a struggle for survival with and against the physical forces which we struggle to understand. Those who understand them best are most likely to succeed, while those who don’t go the way of the dinosaur. Some of us realize that to survive into perpetuity, we must learn how to live in harmony with nature – sometimes, though, our self-interest begins to think of the short run while ignoring the long run, and that’s when we get into trouble.

Most people don’t give the importance of sound economics the proper credence to the way in which humanity progresses. Behind all the important events of history is found important economic turning points – we are at such a point in history now.

Nikolai Kondratiev

Unlike physics, we still imprison people for economic heresy. Back in 1930 Nikolai Kondratiev was imprisoned in Russia for his large cycle beliefs (Kondratiev wave, aka K-Winter), and later was retried on his “crimes” and then executed by firing squad! He simply observed the same cycles later refined by Martin Armstrong who was just recently released from prison after 11 years, one of the longest people ever imprisoned for “contempt of court.” He was tortured in prison and allowed to be beaten nearly to death by placing a homicidal inmate in his cell, then refusing to stop the beating until the guards thought he was dead. That happened right here in modern day America – and there is no doubt that he was held to silence his beliefs as his ideology represented a threat to the powers that control the production of money and markets.

Now those are some serious barriers to the progression of knowledge!

We are all living a big lie, economically, and have done so our entire lives not knowing what exists outside of the box presented to us. In the year 1913 the “Federal Reserve Act” gave the power to control the production of money to the “Federal Reserve Banks” which are not Federal, they possess no reserves, and they are not even a bank. What they are is private corporations owned by private banks, who in turn are owned by private individuals.

This is not only an outright lie in name, but it is clearly a conflict of self-interest. Giving a few private individuals the right to control the production of money inevitably leads to them producing money and using it to buy the political system they desire – one that benefits them. Their benefit is at the expense of others, the further away from the production of money you are, the more it damages you.

There is a natural way of being in regards to money – money is simply an agreed medium of exchange. Its production should never benefit individuals, it absolutely can be created and controlled in such a way that its production benefits everyone equally. There is no need, for example, for a nation to have a national debt. A sovereign nation can simply produce money and spend it into existence instead of borrowing it into being as we do now. Take a look at the money in your wallet, you see that it says “Federal Reserve Note” on top. The term ‘note’ means debt. That debt carries interest paid mostly to the private banks who hold the majority of our nation’s debt.

That debt is their power base. They wield their power to control the government, to control the markets, to control the media, to control our defense industry, to control the medical industry, the nuclear industry, our higher institutions of learning, etc. The production of money is all about control – those who produce it are in control, those who do not are not. If you covet a truly representative government, one that represents YOU, then you must work to return the money creation power to the people as is meant to be the case and as has been the case before in this nation.

So, we’ve been living a central banking lie that has placed us all into a false paradigm – a box with walls that are false. Within that box is found impossible math. There is simply no way that incomes can ever come close to servicing all the debt, and that has led to Macroeconomic Debt Saturation which I can prove has occurred in about five different ways.

Diminishing Productivity of Debt

A fundamental false belief economically is to compartmentalize our debts. When applying for a car loan, for example, the bank will look at your personal debt levels and compare that to your income. But you are not only responsible for your own personal debt, you are also responsible for your town’s debts, your county’s debts, your state’s debts, your nation’s debts, as well as your share of the corporate debt! It amounts to well over $300,000 per person or $1.2 million for every family of four – conservatively, and reality is probably much worse than that. Compare that amount to the average income and it quickly becomes clear that the math is indeed impossible.

Once debt saturation occurs, then “stimulating” the economy with more debt money only works to drag the economy down and to create higher unemployment. This build up of debt must be cleared in order for the economy to create real productive growth. Unfortunately the math of debt has gone exponential – yet another fact that is ignored leading to still more false beliefs.

But the debt cannot be cleared when the political system is controlled by those who produce the debt and got us into this situation to begin with. And this highlights the fact that allowing private individuals to control the production of money goes against the very nature of nature. Math is a part of nature after all, it just is, and there are limits imposed by it.

The impossible math that has taken root around the world is entangling all who get near it. Below is a video called Battling Bad Science by Ben Goldacre who describes many of the ridiculous false beliefs that get propagated in the health industry by the media which is driven by special interest groups’ self-interest:

This same type of twisted self-interest is happening all over the fields of medicine, food production, what we formerly thought of as free markets, the military industrial complex, and really all facets of modern day life. We are living in a central banker backed special interest box.

This box is not good for society. It creates all sorts of false economic beliefs. It is much closer to voodoo than it is to science, because keeping humanity in the dark is profitable to those controlling the population.

There are no solutions to the impossible math that work as long as we continue to live inside of their false box. Tear down the walls to their box, however, and true solutions are immediately clear. Just such a solution can be found within the framework of Freedom’s Vision.

So you see, economics is rooted in and intertwined with science, there is a natural order to the universe with real boundaries that cannot be exceeded.

The proper foundation to a well functioning economy is found in a rule of law that keeps itself well-centered within the natural limits imposed on it. From that proper rule of law the next step is to form a monetary system that benefits everyone equally. Then you can begin to develop human and natural resources to create jobs, wealth, and prosperity.

That wealth pyramid exists within and is surrounded by nature. But before a proper rule of law is established, empathy and communication must exist! Any and all relationships exist because people first communicate with one another, and because all parties involved feel that being in the relationship is beneficial (there’s that self-interest again)! It’s like a good marriage – when you’re in one you know it. You recognize that you are better off as a team, not just an individual, and like all good things it is self-perpetuating when both parties feel good about themselves and their relationship(s). But when you’re in a bad relationship you riot – and just look at the world today.

Right now people are not feeling good about their relationship with their money, they are finally beginning to get focused on the root of the money problem – WHO it is that controls its production (central banks). This is why we are seeing the current set of “Occupy Wall Street” riots – note that each set of riots is getting closer to the root of who controls the production of money.

And so the money and political environment is about to change, but unless we smash a few false assumptions what we wind up with may not be a whole lot better than what we have now.

SMASHING THE BOATING INDUSTRY’S FALSE ASSUMPTIONS…

All industries must operate within the confines of both the physical world, and the economic world that mankind has created. All industries have their false beliefs, and the boating world is no different – I recently wrote about one when discussing Two Engines or One…

Being a life-long boater and economic writer, naturally I realize that the boating industry is in poor economic condition. However, until starting Gateway Yachts and participating in boat shows, I did not fully realize just how anchored the industry is.

My observation is that there are far fewer boats in the shows to go along with fewer attendees. After discussions with those inside the industry, it is clear to me that the boating industry is still living inside of a bubble that is very similar to the housing bubble – with all the same mistakes and more. Boats have become massively expensive on the back of the overall credit bubble. Today boats are financed for far too long of a timeframe, up to 20 years! People simply don’t own boats that long, nor do they hold up their serviceable condition that long without large investments in keeping them that way. Interest rates too, are artificially low – thus people who really can’t afford them own them.

Since the banks “securitize” the debt created from boat loans, they no longer have a vested interest in assuring that the boat remains “above water.” The result, then, is that most boat purchases immediately go underwater because the financial institutions require too little money down and finance them for far too long a term. In fact, most boat owners who have purchased in recent years are now underwater on their loans, meaning that they owe the bank more than they can sell their boat for – same thing that happened with houses.

And just like the housing industry, the boat industry has seen people simply walk away from their boats and their loans. Now even the boat “short sale” is becoming vogue but requires the bank to play along, taking the commensurate write-off. And just like the housing industry, inventories of used boats are high while sales of new boats are stagnant. This is a very slow and painful process, one that promises to keep the industry anchored for years to come.

While I’ve enjoyed boating for a large portion of my lifetime as an industry outsider, it is a different view when looking at the industry with fresh insider eyes.

As I gaze down the rows of stainless towers, flags astern, flybridges up high, antennae, and other expensive appendages piled high, I see a lot of very large, very heavy, and very fuel inefficient boats. Money pits and maintenance nightmares lined up at the docks with their brokers and listings in tow, I can’t help but see dinosaurs sinking deeper into the tar pits of time.

The docks are largely empty, brokers excluded. The economist in me recognizes that there is a part of the economic upheaval that is good. It has a cleansing action that removes the weak and infirm, thus giving rise to another cycle of innovation and less bureaucratic, more nimble companies.

But wait, look over yonder! Behold the light and the pocket of people on the docks! There, behind the one with moniker ASPEN on her transom, people are flocking and squawking like gulls over a school of herring. What I see there is electric – remember, matter = energy. Rows of empty docks, and yet look over there!

What I see over there is innovation rising from the depths of a sunken industry. Innovation that considers both the physical reality that is our universe AND the economic reality in which we all live. You see, Larry had a better idea.

Larry Graf

Aspen Founder and boat designer, Larry Graf, owned Glacier Bay Power Catamaran Company for more than two decades, selling more than 3,000 boats before leaving to found Aspen. He knew that a catamaran’s twin hulls were inherently more stable and much more efficient than the typical V-hull, but he also saw the reality of high fuel and operating costs. Typically a power catamaran requires two engines to remain symmetrical; it took Larry’s artistic eye to innovate through the symmetrical realm into the efficiencies possible with just a single engine powering a two hull design.

To accomplish this, Larry developed a proa hull, which means that one of the two hulls is larger than the other. In this case, the starboard hull is 35% larger than port! The single engine is located in the larger starboard hull – normally this arrangement would produce a constant left turning tendency due to the asymmetric thrust, but that was mitigated via a slight curve, like an airplane’s wing, built into the boat’s hull. The result, after painstaking testing, is an international patent on the technology and a boat that goes straight as an arrow while burning farless fuel than any other boat with a similar displacement. An Aspen is an artistic act of balance, form, and function that equals efficiency.

The hull of the Aspen is a displacement hull, meaning that it does not plane up on top of the water, it cuts through it like a knife, and thus it does not pound on top of the waves, its’ ride is smooth and stable while it slices through the waves. In doing so it produces almost no wake, an indication of just how little drag is present.

We’re talking about a boat that is extraordinarily safe, stable, comfortable, and yet for a nearly 10,000 pound boat burns only a little more than four gallons per hour at a normal cruise speed of about 17 mph. And if you pull it back to trawler speeds, less than about 9 mph, you will sip a miserly 1.2 gallons per hour! Do the math, you are going places in a boat while talking fuel burns measured in miles per gallon, while most of the dinosaurs are measuring their fuel burns in gallons per mile!

And the Aspen is loaded with good engineering, quality hardware, and many other innovative features such as solar panels capable of powering much of the boat’s electrical needs. When you see a product that blends with the physical world, efficiently, you know it – it has the same ring of truth behind it as does the term debt saturation.

Those who know me or have followed my writing for any length of time know that I simply do not say or get involved in things that I don’t believe in, so please don’t just take my word for it, view other testimonials, and see for yourself how the Aspen glides through the water.

I sincerely believe in this design and I believe in Larry. I can’t say enough good about them, that is why I chose the boat for Gateway’s Fractional Ownership Program – it is simply the future of boating. Aspen is currently building the 28’ C90 Aspen, and has plans to build fantastic 36’ C110 and 54’ C150 versions of this boat, and I can’t personally wait to see them on the water.

Of course building new boats is very expensive. Larry takes the extra step to turn his drawings into a mockup, and then invites potential customers to tour the mockup and provide feedback. This is invaluable in developing a product that people actually want. Investment money is needed for these larger vessels, again Larry has done this many times before and knows how to produce returns that are as exciting as his machines (like 50% returns on investment). If you’re interested in backing a real product, an innovative product made here in America, you can contact me and I’ll put you in touch.

While his product is terrific and almost anyone can actually afford to operate it, he still must buy his parts, products, and labor from the central banker bubblishish world, and that means the boat is not inexpensive to acquire – none are. And this is where my own creative mind works in concert with Larry’s by blending in the fractional ownership concept.

To combat the rough economic seas created by private central banking, the Gateway Program sells shares in the Aspen and other (less efficient) boats in 1/8 increments, each bringing with it 5 weeks, or about 35 days, of use each year. This drastically reduces the ownership costs, and in fact is less than 1/8th the cost when financing is considered, all while providing a better ownership experience because the work of cleaning and maintaining the boat is taken care of by us.

The best part is that we are matching private investors, the old fashioned conservative way, to customers who wish to finance their share, thus bypassing the aforementioned central banker box.

And that is how we blend the topics of boating and economics into the physical world.

My cast off to humanity? Be aware that you, everyone, and everything else are all a part of the same field of energy that permeates and surrounds us all. Each one of your actions casts waves into that field of energy - we are all a part of the same fabric – the waves you cast are the information/ instructions of the future. The waves you cast will ripple throughout time. And so when you cast out assumptions, make sure they’re good ones like Larry’s!